The Anatomy of a Hidden Fee
This pricing strategy has a name: drip pricing. Airlines and booking sites lure you in with an attractive base fare, then “drip” additional fees throughout the booking process. Common extras include charges for seat selection, checked baggage, carry-on
bags, in-flight meals, and even a 'convenience fee' just for the privilege of booking online. A 2025 survey found that 8 out of 10 Indian flyers have encountered these kinds of deceptive 'dark patterns' online, with drip pricing being a primary culprit. The goal is simple: anchor your decision to the low initial price. Once you're invested time and effort, you're more likely to accept the incremental charges and complete the purchase, even if the final cost is significantly higher than you planned.
A Boom in Ancillary Revenue
From the airlines' perspective, this strategy is a financial necessity in a hyper-competitive market. While it can feel deceptive, the practice of 'unbundling' fares began as a way for full-service carriers to compete with budget airlines on price. This has turned into a massive revenue stream. Globally, ancillary fees are a core part of airline profitability. Indian carriers are catching up fast. The Indian airline ancillary services market was valued at over USD 6.4 billion in 2024 and is forecast to grow significantly. For example, Air India grew its ancillary revenue by 142% in two years, and Air India Express now earns up to 15% of its total revenue from these add-ons. This isn't just about baggage fees anymore; it includes fare locks, seat upgrades, and travel insurance.
The Illusion of Choice
Proponents argue that unbundling gives consumers choice, allowing them to pay only for the services they want. But this argument crumbles under scrutiny. When basic elements of travel, like sitting with your child or bringing a small suitcase, become paid extras, the choice is an illusion. The practice makes it nearly impossible for consumers to compare the true cost of flights across different airlines without going through the entire booking process for each one. This lack of transparency erodes trust and makes a mockery of the idea of a fair, competitive market. It’s a psychological game that airlines are rigged to win, leveraging cognitive biases like the 'sunk cost fallacy' to push customers toward a higher final price.
Can Regulators Bring Transparency?
Regulators in India are taking notice. The Directorate General of Civil Aviation (DGCA) has been increasingly active in trying to protect consumers from predatory pricing and a lack of transparency. In early 2025, it was reported that hidden fees cost Indian travellers an estimated ₹2,400 crore in the previous fiscal year, prompting an aggressive regulatory overhaul. Since 2024, the DGCA has rolled out rules concerning fare publication and refunds. New rules effective from March 2026 introduced a 48-hour free cancellation window for many bookings. However, the path to transparency is not smooth. A DGCA rule from March 2026 mandating that 60% of seats be available for free selection was suspended within two weeks after strong pushback from airlines. This highlights the central tension: airlines guard their pricing models fiercely, citing commercial sensitivity, while regulators and consumers demand clarity.
